Suppose you are a founder of a start-up company, which finished Series A financing 18 months ago. Before round A financing, there are no other equity holders except the founding team. In Series A round, the company raised $20M with an implied price per share of $1 and a pre-money valuation of $10M. Term sheet with Series A investors contains the anti-dilution provision that allows investors to adjust the price they paid using the following formula if the next round financing occurs at a lower price: = (+)/(+) Where is the price they originally paid, is the number of existing shares including entrepreneurs shares, and 2 is the price paid by Series B investors. is the amount to be raised in round B. The company is facing some difficulties in delivering the milestones but still need a Series B financing to raise another $10M. You approach some investors and the best price you get is only $0.5 per share.

A. If the company take the best price of $0.5 per share in round B financing, how will the ownership structure look like? In another word, what is the ownership percentage by founding team, series A investors, and series B investors after the new round of financing?

B. If is the number of existing shares excluding entrepreneurs shares, what is the new ownership structure?